WASHINGTON — Fewer Americans filed new unemployment claims last week, offering fresh evidence that the nation’s job market is holding steady even as hiring slowed considerably in June.
The Labor Department reported Thursday that initial unemployment claims dropped by 2,000 to a seasonally adjusted 215,000 for the week ending July 4. Economists surveyed by Reuters had anticipated a reading of 218,000 for the same period.
Claims had climbed at the end of May and into early June, but economists largely brushed off that increase as a statistical quirk tied to challenges in adjusting the data around the end of the school year. In some states, non-teaching school employees are permitted to file for unemployment benefits during the extended summer break, which can distort the government’s model for removing seasonal patterns from the numbers.
Although job growth took a sharp dip in June and the payroll figures for April and May were revised downward, economists maintained that no significant change had taken place in the overall labor market. They described the current environment as a “slow hire, slow fire” situation — meaning employers are neither aggressively adding workers nor letting them go in large numbers.
Notes from the Federal Reserve’s June 16-17 meeting, released Wednesday, revealed that policymakers grew increasingly worried about inflation last month. Officials “generally expected labor market conditions to remain stable in the near term, with the unemployment rate staying close to current levels.”
However, the meeting notes also flagged a potential risk, stating that “several participants cited the possibility that uncertainty related to geopolitical developments or the broader economic outlook could lead firms to reduce hiring or begin implementing layoffs.”
At that June meeting, the Fed chose to hold its benchmark interest rate steady in the 3.50% to 3.75% range, though updated projections indicated growing support for a rate increase later this year.
A separate figure in Thursday’s report showed that the number of people continuing to collect unemployment benefits after their first week rose by 8,000 to a seasonally adjusted 1.814 million for the week ending June 27. Analysts noted that this uptick in so-called continuing claims is also being influenced by seasonal adjustment complications linked to school holidays.
